Sustainable Development and Poverty Alleviation

• Sustainable development balances economic growth, society, and the environment.
• Natural resources are considered natural capital, providing essential goods and services.
• Human capital is developed through investments in education and health.
• Resource utilization is unequal, with less developed countries consuming too little.
• In 2015, 10% of the world's population lived in extreme poverty (less than $1.90 per day).
• In 2017, 821 million people were malnourished.
• Rising inequality leads to societal polarization, welfare risks and challenges resource sustainability.
• Economic development is needed to alleviate poverty.

Multiple Faces of Poverty

• Poverty is the deficiency in basic needs for a basic standard of living.

• This deficiency is measured by lack of income, assets, and capabilities.

• Poverty is divided into absolute and relative poverty.

• Absolute poverty is the inability to meet basic needs (food, shelter, water, healthcare, etc.) due to low income.

• Economic growth may not affect those below the absolute poverty line.

• Absolute poverty is measured against a set income level that varies by country based on economic conditions.

• Relative poverty is having significantly less income (50% less) than the average household, affecting access to amenities beyond basic needs.

• Relative poverty changes with the economic growth of the country.

• Relative poverty is a "relative deficiency," where individuals do not enjoy the same living standards as others.

• Relative poverty can be permanent, entrapping families in a low-income situation.

• Persistent poverty: Households with 50-60% less income than average every two out of three years.

• Long-term poverty has significant consequences on economic and social conditions.

Dimensions and Indicators of Poverty:

• Income: Net income per capita
• Education: Child school attendance and adult illiteracy
• Healthcare: Health service, health status, and health insurance
• Access to social services: Electricity, drinking water, toilet, cooking fuel, transportation, and housing
• Social Security: Work status, pension insurance, consumer durables, and social insurance

Causes of Poverty

• The causes of poverty are structural and behavioral/cultural.

Structural Approach

• Systemic issues like discrimination, the profit motive, and underinvestment in social services cause poverty.
• These factors reduce opportunity and increase economic insecurity.
• Failure to accommodate natural differences results in an uneven playing field.
• Capitalism, white privilege, patriarchy, and racism are identified as fundamental causes of poverty.
• Associated with the political left.

Behavioral/Cultural Approach

• Emphasizes culture, behavior, and personal differences as sources of poverty.
• A "poverty culture" perpetuates self-defeating decisions.
• Attitudes like fatalism and rejection of societal norms hinder success.
• Individuals are responsible for their own lives.
• Favored by conservatives and libertarians.

Features Emphasized by Poor People:

• Lack of income and assets for basic necessities (food, shelter, health, education)
• Voicelessness and powerlessness in institutions
• Vulnerability to adverse shocks and inability to cope

Determinants of Poverty

• Assets, productivity of assets, and volatility of returns determine poverty.
• Human assets: Labor capacity, skills, and health
• Natural assets: Land
• Physical assets: Infrastructure access
• Financial assets: Savings and credit access
• Social assets: Networks and political influence

Main poverty causes

• Labor market issues, education, demographics, race, policies, and cultural factors

Relationship Between Conflict and Poverty

• Violent conflict and poverty are interlinked.
• Poverty can contribute to conflict, and conflict can create poverty.
• Development has traditionally addressed poverty, while peace and security efforts have addressed violent conflict, but the two are now converging.

Hypotheses of Relationship:

• Conflict causes poverty.
• Poverty causes conflict.
• Resource wealth causes conflict.

Conflict Causes Poverty

• Battlefield deaths, disablement, and displacement have long-term costs.
• Chronic poverty increases due to higher dependency ratios.
• Macroeconomic effects include falls in GDP, food production, investment, and government revenue.
• War can lead to entitlement collapse and famine.
• Protracted conflicts can lead to intergenerational exclusion and chronic poverty.

Poverty Causes Conflict

• Conflicts are multi-causal with short and long-term factors.
• Isolating and weighting risk factors is difficult.
• Poverty may interact with other factors to produce violent conflict.

Resource Wealth Causes Conflict

• Conflicts occur when rebel organizations are financially viable through predation.
• Rebellion is motivated by greed.

The Advantages and Limitations of Globalization

Basic concept of globalization:

• Globalization is the interconnectedness of the world through increased trade and cultural exchange. The term has negative connotations in the context of developing countries.
• It has increased the production of goods and services.
• Multinational corporations have replaced national firms.
• It reduces national identities through economics, education and politics.
• Developed nations sell more goods to developing nations.

Globalization and Developing Countries

• Globalization in developing countries is manifested in economics and trade, education and health, and culture.

Economic and Trade Processes Field:

• World Bank and International Management promote market reforms through loans.
• Developing countries open markets by removing tariffs.
• Developed countries invest in developing nations, creating jobs.
• Rapid growth in India and China has decreased world poverty.
• Africa still has the highest poverty rates.
• Developed countries exploit low wages in developing nations, causing pollution.
• Developed countries setting up companies in developing nations increases unemployment.
• Rapid growth in India and China has caused world poverty to decrease.
• Africa still has the highest poverty rates, and rural areas of China are not tapping into global markets also suffer greatly from this high poverty.
• Developed countries set up companies and industries to the developing nations to take advantages of low wages and this causing pollution in countries with poor regulation of pollution.
• Developed countries setting up companies and factories in the developing nations can negatively affect the economy of the developed countries and increase unemployment.

Education and Health Systems:

• Globalization develops health and education systems.
• Demand for higher skills has increased education rates.
• Economic growth improves living standards and life expectancy.
• Poor nations can supply better healthcare and sanitation.
• Developing countries can allocate more money for health and education, decreasing illiteracy.
• Skilled workers migrate to developed countries for higher wages, decreasing developing countries' skilled labor.

Culture Effects:

• Cultures are changing through globalization as people imitate American and European cultures.
• Dependence on globalization might lead to the destruction of culture, tradition, identity, customs, and languages.
• Family life changes as young people leave families earlier.

Advantages of Globalization:

• Increases free trade between countries.
• Increases capital liquidity, allowing investment in developing nations.
• Corporations can operate across borders.
• Global mass media ties the world together.
• Increases the flow of communications.
• Increases ease of transportation.
• Reduces cultural barriers.
• Spreads democratic ideals.
• Reduces likelihood of war.
• Increases environmental protection efforts.

Disadvantages of Globalization:

• Decreases environmental integrity as polluting corporations exploit weak regulations.

• Increases jobs for non-skilled and skilled workers in the developing nations.

• Has the potential to create economic inequality between developed and developing countries.

• Increases the likelihood of economic disruptions.

• Corporate influence far exceeds that of civil society organizations.

• Control of world media by corporations may limit cultural diversity.

• Increases the chance of reactions for globalization being violent.

• Increases the risk of unintentional disease transportation.

• Spreads a materialistic lifestyle.

• International bodies infringe on national sovereignty.

• Increases the chance of civil war in developing countries as they vie for resources.

• Globalization is a global economic trend that is here to stay.

• It has advantages and disadvantages, and these things will not disappear.

• Must understand its impact globally, and work altogether to remedy the problems that may arise in the future.

Trade Imbalance Between Developing and Developed Countries

The concept of economic inequality between regions and countries

• Inequality is a very complex idea that has been the subject of much research outputs by philosophers, statisticians, political theorists, sociologists and economists.
• Trade is a key instrument in determining regional and country economic inequality.
• Convergence and divergence hypotheses take trade into account.

Convergence Hypothesis

• Less developed countries should grow faster than more developed ones.
• Latecomers can adopt and exploit existing technologies.
• There are diminishing returns to input factors.
• Less developed economies have an advantage of low production costs.
• Shifting labor from farm to industry boosts productivity.

Divergence Hypothesis

• Divergent trends in inequality developments exist across advanced economies and developing countries.
• Inequality has been exacerbated by technological development and increased skills.
• Growing skill premiums are related to income inequalities in advanced nations.
• Financial deepening is associated with rising inequality in developing countries.

Cause and Effect of Trade Imbalance

• A trade imbalance occurs when the cost of a country's imports exceeds the cost of its exports.

Causes:

• A country does not produce what it requires and must borrow from other countries to pay for imports.
• Companies manufacture goods in other countries.

Effects:

• Trade can enhance a country's standard of living since citizens can access a broader range of goods and services at a lower cost.
• It can also reduce the threat of inflation.
• A trade imbalance may result in more job outsourcing to foreign countries over time.

Measurement of Countries and Regional Inequalities

• Economic inequality measures the inequality between a percentage of population and the percentage of resources received by that population.
• The most often used metrics for evaluating global economic disparity is per capita GDP.

Major characteristics to be considered in such assessment:

• Physical attributes – distribution of natural ability not equal
• Personal Preferences – Relative valuation of leisure and work effort differs
• Social Process – Pressure to work or not to work varies across particular fields or disciplines
• Public Policy – tax, labor, education, and other policies affect the distribution of resources.

Economic Disparity in Africa

• Economic disparity in Africa was quite modest.

Income Inequality

• Income inequality is one of the most unequal, despite low levels of per capita income.
• Inequalities in non-income dimensions of welfare are also high, particularly between men and women and between regions, and have remained persistent over time.

Economic Expansion

• In countries where there is a significant initial income difference, economic growth is less effective at alleviating poverty.
• Economic expansion and inequality reduction must go hand in hand to significantly reduce poverty.

Income Inequality

• Measures of inequality based on GINI coefficients of gross and net incomes have increased substantially since 1990 in most of the developed world.
• Inequality, on average, has remained stable in developing countries, Although at a much higher level than observed in advanced economies.

Market income inequality

• During 1990–2012, market income inequality in advanced economies increased by an average of 50 GINI points compared to a 3 GINI point increase in the net GINI coefficient.

Corruption

The Concept of Corruption

• Critical geography examines corruption as affecting states, particularly in the Global South.
• It illustrates how corruption explanations are politicized and interrelated with material and geographical power regimes.
• Urban informality is a significant linked issue in both the North and South.
• Corruption involves a wide range of behaviors differing in their causes and effects in different spatiotemporal contexts.
• Corruption may be defined in different ways, occurs in varying levels of severity, and takes various forms in time and space, depending on local political cultures and institutional frameworks.
• Corruption is simultaneously a political, economic, legal, and moral phenomenon.
• Corruption shows a negative correlation with economic growth after controlling for institutional efficiency.

Types of Corruption

• Corruption can be categorized in various dimensions to facilitate the understanding of how corruption affects economic performance.
• The concept includes three broad categories of human action; bribery, theft of public assets, and patronage.

Bribery

• Payments to public officials to influence administrative decisions.

Theft of Public Assets

• Unilateral embezzlement or collusion to transfer public assets at below-market prices.

Patronage

• Preferential treatment by public officials, often reciprocated with special favors.

Low vs large value Corruption

• Low value (“petty”) and large value (“grand”) corruption, the larger the value of the corrupt transaction, the higher the position in the public hierarchy of the public official(s) involved.
• “Kleptocracy”: Systematic theft at a grand scale by high public officials.
• “Crony capitalism” or “government capture”: Systematic patronage with large stakes.
• “Kick-backs”: Acts of bribery that involve theft of public assets or patronage.

Geography of Corruption

• Corruption has a geographical essence because social processes are always distributed unevenly across space.
• Corruption has got a geographical essence because social processes are always distributed unevenly across space.
• The causes, nature, and consequences of corruption differ from place to place, depending on the context of historical, cultural, legal and political organization.

Global Nongovernmental Organization

• Analyses of corruption in different regional contexts rely heavily on the corruption indicator of Transparency International, which is a global nongovernmental organization dedicated to monitoring and combatting public and private sector corruption.
• The CPI is a composite indicator based on surveys and interviews with public and private sector officials in each country and expert assessments by 13 sources, including the different global, regional and national organizations.